Top 10 Equity Indices Powering Passive Investing in India: Big-Picture View

Top 10 Equity Indices Powering Passive Investing in India: Big-Picture View 29Jan2026

 

 

Follow @vrk100

 

 

(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

 

 

In an earlier blog, we looked at how passive equity investing in India was shaping up using data as of 30June2025.

Since then, the passive space has continued to grow, with fresh flows and market movements altering the passive landscape.

This blog updates that analysis using the latest available data as of 31Dec2025.

By ranking the top equity indices by passive AUM, it takes a big-picture view of where investor money is actually concentrated.

 

(article continues below)

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Related blogs:

Check Update 11Jan2026 with Charts 98 and 99 of the blog for Total Assets of India MF Industry (13-year data)

Check Update 19Nov2025 with Chart 88 of the blog for passive fund net inflows

Check Update 19Nov2025 with Chart 87 of the blog for passive equity fund assets growth

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025 

India Flagship Equity ETFs with Low Fees and Fair Trading Volumes 12Jun2025  (passive funds)

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 (passive funds)

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1. The Big Picture

India’s mutual fund industry has seen tremendous growth in the past five years. 

As of 31Dec2025, the total size of mutual fund industry is Rs 80.23 lakh crore -- it had grown by 2.6 times in the past five years, from a level of Rs 31 lakh crore as on 31Dec2020.  

 

The snapshot of total assets under management or AUM is as follows (31Dec2025): See chart 1 below for details:

The AUM of active equity segment is Rs 35.73 lakh crore and that of passive equity (both exchange traded funds or ETFs as well as index funds) is Rs 10.07 lakh crore, totaling Rs 45.80 lakh crore.

The share of all equity in total mutual fund industry AUM is 57.1 per cent -- the share has grown from a level of 41.1 per cent as of 31Mar2019.

Remarkably, the share of passive equity funds in total equity assets is nearly 22 per cent.   

Of the total passive equity segment, equity ETF assets are Rs 7.99 lakh crore dominating with 79 per cent of total passive; while equity index funds asset size is Rs 2.08 lakh crore with 21 per cent share.  

It may be noted the total equity assets do not include equity portion of Hybrid schemes. The break-up of debt, equity and other segments of Hybrid category is not made available by AMFI or Association of Mutual Funds of India, the industry body. 

Hybrid schemes consist of schemes that invest in a blend of asset classes across the spectrum -- like, debt, equity, gold and silver. 

The total number of passive equity funds are 468 as at the end of Dec2025.  There are a total of 122 unique equity benchmark indices upon which passive equity funds, both ETFs as well as index funds, are based. 

 

Chart 1: Big picture - India passive equity mutual funds and their asset size as of 31Dec2025:

 

 

 

2. India Top 10 Passive Equity Indices and Assets Size 

 

A peculiar feature of India's passive landscape is the heavy skew towards a few benchmark equity indices.  The passive fund size is heavily skewed toward the top 10 passive indices controlling nearly 90 per cent, or Rs 9.06 lakh crore, of total passive AUM. 

 

The total passive equity AUM, as stated above, stands at Rs 10.07 lakh crore, based on the author’s analysis of raw data sourced from Rupee Vest. 

 

The asset concentration is so massive, the top two equity indices account for 74 per cent of total passive AUM.  

 

This is mainly due to massive EPFO investments (see update 19Jun2025 with charts 51 to 55) in Nifty 50, Sensex, CPSE and Bharat 22 ETFs. 
 

Chart 2: India Top 10 Passive Equity Indices by Fund Size: 

 

(please click on the image to view better) 

 

 

 

Key Observations from Chart 2 above:

 

1. Dominance of Nifty 50 Index:

AUM: Rs 4.97 lakh crore (49.4% of total passive AUM).

Total number of passive funds: 44
 

ETF vs Index Fund split:

ETFs: Rs 4.03 lakh crore (81%)

Index funds: Rs 0.95 lakh crore (19%)

Conclusion: This index dominates India's passive investing space and is the clear market leader in both ETF and index fund formats.

2. BSE Sensex:

AUM: Rs 2.47 lakh crore (24.5% of total passive)

Total number of passive funds: 23

 
Heavily ETF-focused (94.6% of AUM in ETFs).

Shows investor preference for ETFs in flagship indices, Nifty 50 and BSE Sensex.

3. Concentration in Two Indices

Nifty 50 and Sensex together account for Rs 7.44 lakh crore, which is 73.9 per cent of the total passive equity AUM. The rest eight indices make up only 16.1 per cent of the total.

 

4. Break-up of Passive Equity Assets by Fund Type:

 

Of the top 10 equity indices AUM of Rs 9.06 lakh crore, AUM of equity ETFs is Rs 7.46 lakh crore (number of ETFs 80), while that of index funds is Rs 1.61 lakh crore (89).

 

 

3. Break-up of Passive by NSE / BSE / Foreign Indices

 

Who’s Running the Show: NSE vs BSE vs Foreign Indices:

a). NSE / Nifty indices collectively account for Rs 7.20 lakh crore (71.5 per cent of total) of passive equity AUM.

b). BSE indices oversee around Rs 2.68 lakh crore (26.6 per cent).

c). Foreign indices—like Nasdaq‑100—make up just Rs 19,000 crore (just 1.9 per ent) of the mix. 

 

Despite the availability of international passive equity options, foreign indices represent just about 1.9 per cent of total passive equity AUM in India—making international investing far from mainstream. 

 

Check the earlier blog for factors contributing to the low participation.  

 

Chart 3: Break-up of passive equity indices by NSE / BSE / Foreign Indices:

 

 

4. India Top 10 Passive Equity Funds by Assets:

 

As has been highlighted by the author repeatedly over the years, India's passive landscape is heavily tilted: the top 10 passive equity fund schemes  command two-thirds of all passive equity assets under management. 
 

As highlighted in Section 2 above, their dominance is not random but heavily driven by large EPFO investments in just four ETFs tracking Nifty 50, Sensex, CPSE and Bharat 22. 

 

EPFO’s equity exposure is restricted to ETFs tracking these four indices, and is routed through just four fund houses: SBI, UTI, Nippon India, and ICICI Prudential.

 

Out of the total ten, five passive funds based on Nifty 50 have assets of Rs  4.09 lakh crore (61 per cent of total), four funds based on Sensex have assets worth Rs 2.32 lakh crore (35 per cent) and one CPSE ETF accounts for Rs 0.29 lakh crore (4 per cent) of assets.

 

Of these top ten funds, nine are ETFs holding around 96 per cent of the total AUM, while just one index fund makes up the remaining 4 per cent. 

 

 

Table 4: India Top 10 passive equity funds by assets: 

 

 

Data excluded from index-wise analysis:

Indices with combined passive equity AUM of less than Rs 2,000 crore have been excluded from the index-wise ranking and grouped under “funds not included above.” (see chart 5 given as "additional data" at the end of the blog)

These excluded indices together account for about 3.7 per cent (Rs 37,400 crore) of total passive equity AUM -- spread across 208 passive funds -- indicating a long tail of very small and thinly tracked benchmarks.

Of this, ETFs account for 112 funds with a combined AUM of roughly Rs 18,535 crore. Index funds make up the remaining 96 funds, managing about Rs 18,864 crore.

Most of these indices have limited investor participation and are often represented by just one or two funds. Their small asset size suggests either niche investor appeal or products that are still in an early stage of adoption.

Excluding them helps keep the analysis focused on indices that meaningfully influence the overall passive equity landscape.

 

5. Investment Implications:

 

From an investment perspective, the data points to a few clear implications for novice investors.

First, passive equity investing in India is still best suited for core portfolio exposure through a small set of large, liquid indices, especially the Nifty 50 and Sensex, which dominate both assets and liquidity. These indices offer scale, low tracking error and cost efficiency that smaller indices struggle to match.

Second, the sharp gap between the number of funds and the concentration of AUM suggests that many passive products exist without meaningful investor adoption. 

 

Investors should therefore focus less on product variety and more on liquidity, tracking error and expense ratios, particularly when choosing between multiple funds tracking the same index.

Third, midcap, sectoral and factor-based indices remain satellite allocations rather than core holdings. Their relatively small AUM and fragmented flows indicate higher volatility and execution risk, making them suitable only for sophisticated investors.

Fourth, the dominance of ETFs in the largest indices highlights their role as the preferred vehicle for institutional and long-term allocations. 

 

Retail investors, however, may still find index funds more practical where ETF liquidity or market access is a concern.

Finally, the data reinforces that passive investing in India is evolving gradually rather than explosively diversifying. For most investors, a simple, low-cost exposure to one or two broad-market indices remains the most efficient way to participate in equity markets.

This isn’t investment advice. Even though the author is a CFA Charterholder with nearly 25 years of experience in the financial markets, this is just general insight—not a recommendation.  

 

 - - -

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References and additional data:

AMFI Monthly Data 

Nifty Passive Insights - Quarterly

NSE Passive Funds - dedicated website for passive funds 

Rupee Vest MF screener

NSE Index Dashboard - Dec2025 PDF (to compare risk / return data of Nifty Indices)

Chart 5. India Passive Equity Funds and Their Asset Size: A Brief Analysis >

 

 

 

 

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Related Blogs on Mutual Funds (for a comprehensive list of all articles on Mutual Funds, look for section "4 Mutual Funds" in my blog Blog of Blogs Theme-wise): 

 

Check Update 11Jan2026 with Charts 98 and 99 of the blog for Total Assets of India MF Industry (13-year data)

Check Update 19Nov2025 with Chart 88 of the blog for passive fund net inflows

Check Update 19Nov2025 with Chart 87 of the blog for passive equity fund assets growth

Mutual Fund Asset Class Returns 31Dec2025 (Fund categories with similar returns)

 

NSE's Backtesting Claims Child Indices Beat Parent Indices - But Does It Hold in Real World? 09Dec2025 (incl calendar year returns of Nifty 50, Nifty Midcap 150 and the so-called smart beta indices) (NSE Indices / Nifty Indices)

 

Factor Investing in India: Do "Smart Beta" Indices Outsmart Nifty 50 and Midcap 150? 24Nov2025 (incl trailing returns; calendar year returns of Nifty 50, Nifty Midcap 150 and the so-called smart beta indices) (NSE Indices / Nifty Indices)

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025

 

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025  (Big picture view of Passive Equity Funds - passive funds)  

 

India Flagship Equity ETFs with Low Fees and Fair Trading Volumes 12Jun2025  (passive funds)

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 (passive funds)

 

Mutual Fund Asset Class Returns 02Jun2025 (Fund categories with similar returns)

 

Arbitrage Funds and Avenues 24Jul2024

 

Rapid Growth is Assets of India's MF Industry 18Jul2024

Mutual Fund Categories with Similar Returns 17Jul2024

 

Side Pocketing Episode of Aditya Birla SL Dynamic Bond Fund 17Jul2024

 

Crux of Kotak Debt Hybrid Fund 15Jul2024

India Fixed Income Data Bank 02Jul2024

The Little Secret Behind Nifty Next 50 Index's Recent Success 13May2024

NSE Indices Calendar Year Returns: 2006 to 2024   05May2024

 

How to Buy Nifty Midcap Index 03May2024 

 

NSE Emerging Indices Comparison 31Mar2024 

 

India Passive Funds and Their Asset Size 29Apr2024 (Big Picture View of Passive Equity Funds) 

 

Guide to Tracking Error of Mutual Funds 27Apr2024 

 

Mutual Fund Asset Class Returns 31Mar2024 

 

Gilt Funds Worth Considering! 14Apr2024

 

Select Gilt Funds Performance 05Mar2024

 

Equity ETFs and Equity Index Funds Compared 05Feb2024

 

Indian Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index

 

Quarterly Data of MF Assets 31Mar2023

 

Understanding Corporate Debt Market Development Fund (CDMDF) 

Negative Impact of Debt Mutual Fund Tax Changes 

 

EPFO Investments in Stocks Via ETFs 

 

NSE Indices (Nifty 50, Nifty Next 50, Nifty 100 and Nifty 500) Comparison 31Dec2022

Why Do Indian Equity MFs Always Disappoint Investors?

 

Indian Mutual Funds and the Art of Ripping off Investors

  

Who is Eating My Gold ETF Return?

 

Mutual Fund Asset Class Returns 31Mar2024 (MF categories with similar returns)

 

Mutual Fund Asset Class Returns 31Dec2023 

------------------------ 

Read more:

Blog of Blogs Theme-wise 

 

Weblinks and Investing

 

India Fixed Income Data Bank

 

Indian Economy Data Bank 

India Forex Data Bank 

 

Who is Eating my Gold ETF Return? (gold data / gold ETF data)

 

JP Morgan Guide to Markets 28Feb2025  

 

Corporate Groups and Listed Companies 29Dec2024

 

Corporate Governance Concerns - Indian Companies 13Dec2024

 

Stocks and Peer Comparison by Industry 16Feb2024  

 

various uploads on Scribd by VRK100  

 

 

Canada's Mark Carney at Davos: Middle Powers Must Step Up 28Jan2026

 

Nifty IT Underperformance Explained – Nasdaq Outshines Indian IT in 2025  26Jan2026

 

Inside the BSE 500 and S&P 500: Top Stocks, Top Sectors, Big Risks 31Dec2025  

 

JP Morgan Guide to Markets Dec2025 

 

RBI's New Comfort with Foreign Capital Spurs FDI Turnaround in India's Financial Sector 17Jan2026 

 

The Next Generation of Market Leaders: A Fresh Look at Nifty Next 50's Corporate Landscape 15Jan2026

 

Mutual Fund Asset Class Returns 31Dec2025 

 

NSE Emerging Indices Fundamentals Comparison 31Dec2025 (NSE Indices / Nifty Indices) 

  

NSE Indices Calendar Year Returns 2006 to 2025  07Jan2026  

 

FPIs Said Goodbye, Retail Kept Mum, DIIs Stayed Strong: India’s 2025 Market Story 02Jan2026 

 

BSE 500 versus Nifty 500: Same Market, Different Indices 02Jan2026 

 

Central Banks Fuel Gold Speculation: Risking Pain for Ordinary People 23Dec2025

 

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Disclosure:  I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

 

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

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Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025

 

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025

 

Follow @vrk100

 

 

(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

 

 

 

The author is a data dog, likes to work with data instead of compelling narratives as practised by several market participants.

 

In a market flooded with narratives and opinions, this blog stands apart by grounding its insights in hard data. We're diving deep into the numbers that define India's passive equity landscape, offering a balanced perspective.

Within a vast pool of equity mutual funds in India, passive equity funds have carved out a niche, yet their distribution and dominance vary widely across different indices.

This blog aims to dissect these variations, providing a comprehensive analysis of the top passive equity indices by their AUM. We'll explore the concentration of assets, the influence of large institutional investors like the Employees' Provident Fund Organisation (EPFO) and the regulatory curbs shaping this sector.

For those who value data over stories, this exploration offers a factual, nuanced understanding of India's passive equity market. Let's delve into the numbers that tell the real story.

 

If data isn't your preference, you might want to skip this blog. 

 

 

2. The Big Picture

 

India’s mutual fund industry has seen remarkable growth, with total AUM or assets under management crossing Rs 74 lakh crore as of 30Jun2025, with active equity funds alone managing Rs 33.47 lakh crore (excluding equity portion of hybrid funds), as per data from mutual fund industry body AMFI. 

 

Of the total AUM of Rs 74.15 lakh crore, passive equity vehicles—comprising ETFs and index funds—hold around Rs 9.36 lakh crore, as per Rupee Vest data. There are a total of 104 unique equity benchmark indices upon which passive equity funds, both ETFs as well as index funds, are based. 

 

The total number of passive equity funds are 411 as at the end of Jun2025.  

 

Of the total passive, equity ETF assets are Rs 7.45 lakh crore dominating with 80 per cent of total passive; while equity index funds asset size is Rs 1.91 lakh crore with 20 per cent share (see table 1 below). 

 

Equity indices with less than Rs 2,000 crore AUM: 

 

There are 170 passive equity funds—both ETFs and index funds—that together manage the Re 29,556 crore in AUM spread across indices with less than Rs 2,000 crore assets locked in each equity index. 

 

The Rs 29,556 crore AUM is merely 3.2 per cent of the entire passive equity AUM — meaning over 96 per cent of passive AUM is concentrated in larger indices with more than Rs 2,000 crore AUM.
 

In other words, while a large number of funds exist in these niche or mid- and small-cap indices, their combined asset size is negligible compared to the major index funds and ETFs that dominate with over 96 per cent of the assets.

In practical terms: 

 

Out of the total 104 benchmark indices underlying passive equity funds, only a small handful have significant adoption. The rest—indices with less than Rs 2,000 crore in assets—collectively account for a very small sliver of the overall pie.

What does this reveal?

Passive investing in India is highly concentrated around a few big indices—mainly Nifty 50, Sensex, CPSE and Bharat‑22. Retail or niche-mandate indices have much lower traction, even though there are many of them.

This underlines a structural imbalance: most passive equity assets are locked in established, large-cap indices, while a wide array of other indices—despite being available for investment—hold minimal AUM individually or collectively.

 

Compare data: The blog is an update of earlier blog titled "India Passive Funds and Their Asset Size." 

 

To compare, the AUM of passive equity funds grew from Rs 6.65 lakh crore as of 31Mar2024 to Rs 9.36 lakh crore as on 30Jun2025, a growth of over 30 per cent in the past 15 months -- the growth is attributed to a combination of 13 per cent increase in Nifty 50 index and increased net inflows to passive funds during the period. 

 

Table 1: Big picture - India passive equity funds and their asset size:

 

 

3. India Top 10 Passive Equity Indices and Assets Size 

 

A peculiar feature of India's passive landscape is the heavy skew towards a few benchmark equity indices.  The passive fund size is heavily skewed toward the top 10 passive indices controlling more than 90 per cent, or Rs 8.46 lakh crore, of total passive AUM. 

 

As mentioned above, passive equity funds track 104 equity indices.  

 

The asset concentration is so massive, the top two equity indices account for 73 per cent of total passive AUM.  

 

This is mainly due to massive EPFO investments (see update 19Jun2025 with charts 51 to 55) in Nifty 50, Sensex, CPSE and Bharat 22 ETFs. 
 

 

Key Observations from Table 2 below:

1. Dominance of Nifty 50 Index:

AUM: Rs 4.56 lakh crore (48.8% of total passive AUM).

Total number of passive funds: 41
 

ETF vs Index Fund split:

ETFs: Rs 3.71 lakh crore (82%)

Index funds: Rs 0.85 lakh crore (18%)

Conclusion: This index dominates India's passive investing space and is the clear market leader in both ETF and index fund formats.

2. BSE Sensex:

AUM: Rs 2.27 lakh crore (24.2% of total passive)

Total number of passive funds: 22

 
Heavily ETF-focused (94.4% of AUM in ETFs).

Shows investor preference for ETFs in flagship indices, Nifty 50 and BSE Sensex.

3. Concentration in Two Indices

Nifty 50 and Sensex together account for Rs 6.83 lakh crore, which is 73 per cent of the total passive equity AUM. The rest eight indices make up only 17.5 per cent of the total.

 

4. Break-up of Passive Equity Assets by Fund Type:

 

Of the top 10 equity indices AUM of Rs 8.46 lakh crore, AUM of equity ETFs is Rs 7 lakh crore (number of ETFs 67), while that of index funds is Rs 1.46 lakh crore (84).

 

Table 2: India Top 10 Passive Equity Indices by Fund Size: 

 

(please click on the image to view better) 

 

 

4. Break-up of Passive by NSE / BSE / Foreign Indices

 

Who’s Running the Show: NSE vs BSE vs Foreign Indices:

a). NSE / Nifty indices collectively account for Rs 6.70 lakh crore (71.6 per cent of total) of passive equity AUM.

b). BSE indices oversee around Rs 2.50 lakh crore (26.7 per cent).

c). Foreign indices—like Nasdaq‑100—make up just under Rs 16,000 crore (just 1.7 per ent) of the mix. 

 

Despite the availability of international passive equity options, foreign indices represent just about 1.7 per cent of total passive equity AUM in India—making international investing far from mainstream. 

 

This low participation stems from multiple factors. Some of those are:

1. Strong home bias among Indian investors (not unique to India):

Both retail and institutional investors overwhelmingly favor domestic assets. 

2. RBI- and SEBI-imposed restrictions on overseas MF investments:

The RBI and SEBI currently limit mutual fund investments in overseas equity securities to USD 7 billion industry-wide; and further caps overseas ETF investments to USD 1 billion industry-wide. 

3. Regulatory bottlenecks and lack of fresh inflows:

With both the overall overseas equity and overseas ETF limits hit, fund houses have stopped accepting new investments into international schemes unless redemptions free up space. 

Fund houses have appealed repeatedly to RBI to raise limits, but there is no clarity on easing the restrictions. India's Finance Ministry too maintains a stony silence on this. 

As a result, passive investments in foreign indices remain negligible in India—despite global market appeal, the structure simply doesn't support meaningful scale.

 

Table 3: Break-up of passive equity indices by NSE / BSE / Foreign Indices:

 

 

 5. India Top 10 Passive Equity Funds by Assets:

 

As has been highlighted by the author repeatedly over the years, India's passive landscape is heavily tilted: the top 10 passive equity funds command two-thirds of all passive equity assets under management. 
 

As stated in Section 3 above, their dominance is not random but heavily driven by large EPFO investments in just four ETFs tracking Nifty 50, Sensex, CPSE and Bharat 22.

 

Out of the total, six passive funds based on Nifty 50 have assets of Rs 3.97 lakh crore (63 per cent of total), three funds based on Sensex have assets worth Rs 1.93 lakh crore (31 per cent) and one CPSE ETF accounts for Rs 0.36 lakh crore (6 per cent) of assets.

 

Of these top ten funds, eight are ETFs holding around 93 per cent of the total AUM, while just two index funds make up the remaining 7 per cent. 

 

Table 4: India Top 10 passive equity funds by assets: 

 

 6. Finally

 

India's flagship equity indices, Nifty 50 and Sensex dominate the passive equity landscape in India—nearly three-quarters of the total passive assets are tied to these large-cap benchmarks.

Mid-, small-cap and smart‑beta indices (like Nifty 50, Midcap, Smallcap, Momentum) are gaining traction but still represent a relatively smaller slice.

India’s passive equity fund universe is rapidly scaling up, but it’s still heavily skewed toward large-cap tracking. While indices like Nifty Next‑50 or mid-, and small‑cap options are gradually climbing the ladder, the majority of the pie remains with Nifty 50 and Sensex-linked strategies. 

 

For investors, this signals both opportunity and imbalance—there’s room to diversify beyond top 50 heavyweights.

 

7. Action button

 

So, having discussed the passive equity landscape thoroughly, what are the investment implications?

 

Portfolio diversification is a key pillar of investing. India's passive equity landscape is still evolving.

 

Even though passive equity landscape is uneven, investors can explore a variety of indices to start with. Those new to investing can opt for safer alternatives like passive funds based on Nifty 50 and Sensex, depending on your risk appetite, asset allocation, personal situation and return expectations.

 

A succinct action plan for investors:

 

> Core part: A large part of your surplus money can be invested in passive funds based on Nifty 50 and Sensex, as India is expected to post reasonable growth rates of 6 to 8 per cent over the next five to 10 years

 

> Satellite part: Complement the core with a few index funds or ETFs that track Nifty Next 50 or Nifty Midcap 150 to capture broader domestic market participation

> Play money: Just for learning experience and get a grip on market psychology, a very small portion of your surplus money can be invested in the so-called smart-beta indices after thoroughly doing your own due diligence

 

> It may be mentioned, despite claims to the contrary by the index providers, "smart-beta" indices have not been able outperform their parent indices on a consistent basis

 

> Smart-beta passive funds still have higher expense ratios, low to medium volumes (for ETFs) and moderate investor interest 

 

> Some smart beta indices gaining traction in recent years are:

 

-- Nifty 200 Momentum 30 Index

-- Nifty 100 Low Volatility 30

-- Nifty Alpha Low Volatility 30 

 

> As you know, passive funds based on 'momentum' indices are prone to greater volatility and higher risk of losing money

 

> Global flavour: Regulators permitting, you could add a few passive funds based on foreign indices for international diversification and see how things go

 

> Most of the sectoral / thematic funds are not suitable for a large majority of investors; as such, these categories should be on your highly-avoidable list 

 

> If you are looking for equity ETFs, make ensure to do your homework on liquidity, bid-ask spread, high ETF volumes and reasonable asset size

 

> Stay disciplined with rebalancing: Regularly assess and rebalance your allocations to maintain your strategy mix; you could broadly aim for 50–75 per cent large-cap, 10–20 per cent mid-cap, 5 per cent global, and 5 per cent play money

 

> The asset mix presented here is merely a heuristic — not set in stone; you should determine your own mix based on the various factors discussed elsewhere

 

 

In this regard, you may be guided by the following list of articles the author has written in the past two to three years: 

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter  

How to Buy Nifty Midcap 150 Index 

 

India Passive Funds and Their Asset Size (Big picture view of Passive Equity Funds) 

 

Equity ETFs and Equity Index Funds Compared

 

India Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index 

 

India Equity ETF Risks and Returns 

 

Nifty BeES: Making Risk-Less Profits 

 

Junior Nifty BeES ETF: How to Make Higher Profits

 

This isn’t investment advice. Even though the author is a CFA Charterholder with nearly 25 years of experience in the financial markets, this is just general insight—not a recommendation.  

 

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Read More: 

 

Additional data:

 

Table 5: India passive equity funds and their asset size: Top 25 passive equity indices and their asset size with break-up of ETF and Index funds > 

 

(please click on the image to view better) 

 

 

 

References:

 

Nifty Passive Insights - Quarterly

NSE Passive Funds - dedicated website for passive funds 

Rupee Vest MF screener

 

NSE Index Dashboard - Jun2025 PDF (to compared risk / return data of Nifty Indices)

 

-------------------

 

Related Blogs on Mutual Funds (for a comprehensive list of all articles on Mutual Funds, look for section "4 Mutual Funds" in my blog Blog of Blogs Theme-wise): 

 

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 

 

Mutual Fund Asset Class Returns 02Jun2025 (Fund categories with similar returns)

 

Mutual Fund Asset Class Returns 30Sep2024  (Fund categories with similar returns)

 

Arbitrage Funds and Avenues 24Jul2024

 

Rapid Growth is Assets of India's MF Industry 18Jul2024

Mutual Fund Categories with Similar Returns 17Jul2024

 

Side Pocketing Episode of Aditya Birla SL Dynamic Bond Fund 17Jul2024

 

Crux of Kotak Debt Hybrid Fund 15Jul2024

India Fixed Income Data Bank 02Jul2024

The Little Secret Behind Nifty Next 50 Index's Recent Success 13May2024

NSE Indices Calendar Year Returns: 2006 to 2024   05May2024

 

How to Buy Nifty Midcap Index 03May2024 

 

NSE Emerging Indices Comparison 31Mar2024 

 

India Passive Funds and Their Asset Size 29Apr2024 (Big Picture View of Passive Equity Funds) 

 

Guide to Tracking Error of Mutual Funds 27Apr2024 

 

Mutual Fund Asset Class Returns 31Mar2024 

 

Gilt Funds Worth Considering! 14Apr2024

 

Select Gilt Funds Performance 05Mar2024

 

Equity ETFs and Equity Index Funds Compared 05Feb2024

 

Indian Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index

 

Quarterly Data of MF Assets 31Mar2023

 

Understanding Corporate Debt Market Development Fund (CDMDF) 

Negative Impact of Debt Mutual Fund Tax Changes 

 

EPFO Investments in Stocks Via ETFs 

 

NSE Indices (Nifty 50, Nifty Next 50, Nifty 100 and Nifty 500) Comparison 31Dec2022

Why Do Indian Equity MFs Always Disappoint Investors?

 

Indian Mutual Funds and the Art of Ripping off Investors

  

Who is Eating My Gold ETF Return?

 

Mutual Fund Asset Class Returns 31Mar2024 (MF categories with similar returns)

 

Mutual Fund Asset Class Returns 31Dec2023 

 

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Read more:

 

Blog of Blogs Theme-wise 

 

Weblinks and Investing

 

India Fixed Income Data Bank

 

Indian Economy Data Bank 

India Forex Data Bank 

 

Corporate Groups and Listed Companies 29Dec2024

 

Corporate Governance Concerns - Indian Companies 13Dec2024

 

Stocks and Peer Comparison by Industry 16Feb2024  

 

 

 

The Pitfalls of Market Timing and Why FOMO is Your Worst Financial Adviser 12Jul2025 

 

JP Morgan Guide to Markets 30Jun2025 

 

The Elusive Current Account Surplus: What 25 Years Data Reveal About India's Trade Balance 30Jun2025

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025 

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 

 

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Disclosure:  I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

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